Update on Brexit Activity

The Association is continuing to work closely with Fergus McReynolds, Director of EU Affairs for EEF GB and EEF NI, as the UK prepares to exit the European Union. Please find below a summary of the most recent events and some of EEF’s commentary.

Summary of Article 50 week

The letter from Prime Minister May fired the starting gun on two years of negotiations to agree a divorce deal which will set out the terms under which the UK leaves the EU and – we hope – a new partnership based on trade and close cooperation with our European partners. This marks a shift with geo political and generational implications, for both citizens and businesses.

While the mechanism is up and running this will in the end be a political deal between the nations’ leaders – and the politics is of course potentially toxic.

The actual time for negotiating may in reality be much shorter than two years. Any deal will need to be on the table for consideration by January 2019, leaving just over 12 months for the real negotiation, once you’ve taken into account elections in France and Germany and ratification by the European and UK parliaments, that’s all assuming those elections don’t throw up any big surprises or upsets.

So what does this mean for manufacturing?

Well the first message from the manufacturing sector is clear, no deal is not an option. This has been reiterated by ourselves and by our European partners in CEEMET, the EU wide manufacturing group, setting out the need for a Brexit deal that reduces the risk of economic shocks.

As we have set out in our Brexit Briefing on Trade with the EU, no deal would mean a significant disruption to trade between manufacturers in the EU and the UK, unlike a typical free trade-type negotiation where walking away simply means the continuation of the status quo with neither party losing out, this is not the case between the EU and the UK. Should the UK walk away with no preferential access to the EU or international markets in place, on day one of Brexit our sector would immediately find itself at a loss.

So what do we want to see from the negotiations?

EEF’s primary call is to agree a reasonable deal which allows for seamless trade ensuring that we avoid unnecessary tariff burdens and reduce the possibility of technical barriers to trade from administrative blocks to divergence in regulation. In order to deliver this we are firmly of the belief that a significant period of transition will be needed to deliver an orderly and smooth exit from the EU.

In addition, manufacturers will also need to employ and deploy people as freely as possible after Brexit, with employers in manufacturing companies needing ongoing access to workers with higher level and other technical skills from the EU and worldwide to maintain their ability to invest, grow and train in Britain. The EEF recommendations for a new model on migration are set out in our second Brexit Briefing.

Finally the government has published its white paper on the ‘Great Repeal Bill’ which seeks to address the regulatory uncertainty of Brexit. Our first primary call is for the adoption of the current legislative environment to ensure little or no disruption in regulation for businesses and continued trade with the EU. It is our view that in time, once the final deal on our future relationship has been agreed and allowed to bed in that we should work with Government to review our legislation to ensure it is fit for purpose. However we will still need to find a mechanism for UK and EU regulatory cooperation to allow for ongoing smooth trading relationships.

Where next?
This is just the start. Negotiations will probably be very public with all sides fighting a PR war to meet the perceived requirements of different audiences. One thing is clear however. The stakes are very high for industry in the UK and across the continent. It will be important that decision makers are held to account, to ensure they are putting the needs of manufacturers at front and centre.